September 19, 2022
New data from Statistics Canada has shown that construction employment in Ontario continues to reach new record highs, breaking the previous record from May. The labour force also continues to grow to record size. Unemployment continues to remain low. In contrast, permit values decreased across all sectors month-over-month (June 2022-July 2022) and year-over-year (July 2021-July 2022). However, overall ICI year-to-date permit value in July was slightly higher than last year.
LABOUR FORCE FROM JUNE TO AUGUST
Labour force and employment in the construction industry were exceptionally strong throughout the summer. Labour force numbers reached consecutive record highs in June and July, with 621 and 628.3 thousand participants respectively. August numbers remained the same as July. Similarly, employment numbers also climbed to a record high in June to 601.3 thousand, and again in July to 614.9 thousand. In August, employment decreased slightly to 612 thousand.
Unemployment rate was also low throughout the summer. In July, the rate dropped to 2.1%, the lowest rate since September 2018 (1.9%). The rate went up slightly in August to 2.6%, which was still lower than any other monthly unemployment rate from 2019 to present.
The unemployment rate in Ontario’s construction sector is also much lower than the average rate for all industries (6.3% as of August), further demonstrating the strength of employment in construction relative to the rest of Ontario.
PERMITS APRIL TO JULY
Total permit value change
Total permit value in ICI construction was down 32.6% from June to July of this year (from $1.90 to $1.28 billion), and down 25.1% from July 2021 to July 2022 (from $1.71 to $1.28 billion).
Monthly changes and trends in each sector
In the industrial sector, permit values increased from March to April by about 14% and remained relatively stable from April to June ($484.7-461.9 million). Between June and July there was a 45% decline down to $253.3 million. In the commercial sector, permit values fell from March to May ($760.0-592.9 million), before rising sharply in June to $1.1 billion (a month-over-month increase of 88.3%). From June to July, values fell by 23.3% to $856.6 million (still higher than levels in March). In the institutional sector, permit values increased from March to May to reach a peak of $434.2 million, before falling to $317.8 million in June (-26.8%) and $168.4 million in July (-47%).
Yearly changes
Year-over-year changes in July, however, were all negative. Commercial permit values decreased -10.5% (from $956.5 to 856.6 million), industrial by -25% ($337.6 to 253.3 million), and institutional by -59.1% ($412 to 168.4 million). The drop in permit values in July (both compared to July 2021, and June 2022) across all sectors may be in part due to the interest rate announcement in July, where the target rate jumped 100 points (1%), the largest hike since 1998.
Year-to-date
In contrast to the negative month-over-month and year-over-year changes seen in July, year-to-date permit values from Jan-July were mostly positive when compared to the same period in 2021. Overall year-to date building permit value was up 10%; up 2.9% in the commercial sector, 57.2% in the industrial sector, and down 12.7% in the institutional sector.
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FOR MORE INFORMATION, CONTACT:
Katherine Jacobs
Director of Research
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222
F 416.620.5310
kjacobs@iciconstruction.com
